Jason M. Tyra, CPA, PLLC helps you stay in compliance with Texas taxes. The State of Texas is one of only a handful of states that does not collect income taxes from its citizens. Instead, Texas derives revenue from more than thirty other non-income taxes and fees levied on consumers and business owners. Of these, Texas business owners are most likely to be audited by the Texas Comptroller for compliance with the two highest grossing taxes- Texas Limited Sales & Use Tax and Texas Franchise Tax.
Texas Limited Sales, Use & Excise Tax
The State of Texas levies a Sales Tax on most purchases of services or tangible personal property in the amount of 6.25% on the final sale price. In addition, cities, counties, and special purpose districts (such as hospitals, crime control districts, or transit services) may levy an additional rate of up to 2%, for a combined statutory maximum rate of 8.25%. The tax is paid by the purchaser of the product or service (not the seller) and collected at the time of sale. The seller is required to collect and remit the tax on a monthly, quarterly or annual basis, depending on annual gross sales, and is generally authorized to retain a small percentage of the amount due in compensation for the time required to due so.
It is important for retailers to develop and implement an effective process for recording taxable sales and reporting them to the Texas Comptroller. Though the portion of businesses selected for audit each year is low (between 2% and 5%), substantial non-compliance could result in assessment of tax, penalties and fees sufficient to drive you out of business.
Jason M. Tyra, CPA, PLLC helps Texas entrepreneurs stay in compliance with the tax code. We can show you how and what to report and we can file your reports for you. Additionally, we can represent you before the Texas Comptroller if you are selected for an audit to ensure that you won’t have to pay taxes that you don’t owe.
Texas Franchise Tax
The State of Texas collects Franchise Tax, also known as the “Margin Tax”, from all for-profit corporations, limited liability companies, limited partnerships, business trusts and professional associations in exchange for the privilege of doing business in the State. Some non-profits are also subject to the tax. Each year, companies pay the greater of the tax on net taxable capital or net taxable earned surplus at the rate of .5% for wholesalers or retailers and 1.0% for all others. Companies with less than $1,000,000 in revenue are exempt from the tax, but are still required to file a report.
Jason M. Tyra, CPA, PLLC provides Texas Franchise Tax preparation and filing for Texas entrepreneurs. Additionally, we can represent you to the State’s auditors if the Comptroller targets your business for an audit.
Texas Comptroller Audit Representation
If you have been notified by the Texas Comptroller that you are being audited, you should carefully consider whether to retain a Certified Public Accountant to represent you during the audit. Though many small business owners choose to handle the audit on their own, some find retaining a skilled and knowledgable accountant to be of tremendous value.
Jason M. Tyra, CPA, PLLC employs former auditors for the Texas Comptroller. We can help you prepare for the audit in order to identify and mitigate any actual or potential issues before the auditor examines your records. Alternatively, we can examine your assessment after the auditor has completed his or her field work to see how we can reduce the amount due. Though most of the Comptroller’s auditors are professional and well trained, they do make mistakes that could cause you to pay taxes that you don’t owe.